Green New Deal group calls for break-up of banks

A "Green New Deal" to tackle the triple threats of the credit crunch, high oil prices and climate change has been proposed by a group of experts in finance, energy and the environment.

The proposals call for massive investment in renewable energy, creating thousands of jobs, while also seeking to rein in the "distorting power" of the banking industry. Among the more radical plans, they suggest large banking groups should be forcibly demerged, to lift the threat of the kind of systemic damage that has forced governments to use public money to prop up the likes of Northern Rock.

The group hopes to shift the balance of power by building a new alliance of environmentalists, industry, agriculture and unions to promote the interests of the wider economy, instead of what are described as "footloose" financiers in the City, while ensuring that more low-cost capital is available for pressing priorities.

It is pressing the government for large-scale legislative reform and calls for tighter regulation of the financial services sector, help to finance investment in renewable energy in poorer countries, a windfall tax on the profits of oil and gas companies to create an oil legacy fund, and a clampdown on offshore tax havens.

The members of the Green New Deal group include Andrew Simms, policy director of the New Economics Foundation thinktank; Tony Juniper, former director of Friends of the Earth; Charles Secrett, an adviser on sustainable development; Caroline Lucas, a Green party MEP, and Larry Elliott, economics editor of the Guardian. "We need real leadership and vision to get through this, and right now we are not seeing it," said Juniper.